Impressive result and future growth potentials shown by Vitafoam has seen investors compensate shares of the company with higher prices amid wobbling equity market performance.
Although the Nigeria stock exchange (NSE) market has recently witnessed positive streak extending into its 5th consecutive trading session on Wednesday, buoyed by the listing of MTN shares, buy pressure witnessed in the shares of Vitafoam as at the end of trading saw the stock rally.
Vitafoam gained 9.82 percent to hit N4.25, a 3-year high after the company doubled its net income as detailed in its 6 months financial stated for the period ended march 2019.
On the back of impressive result, Vitafoam investors’ saw value for their holdings increase by N725 million year-to-dates (YTD) to N5.316 billion in market capitalization.
Analysis of the company’s financial show that Vitafoam Nigeria recorded a profit after tax surge by 150 percent to N774.7 million in its 2019 half year result against N309.7 million in the corresponding period of 2018.
During the period, company’s revenue from its local market increased 21 percent to N12.66 billion against N10.50 billion in 2018. Likewise, revenue from market outside Nigeria improved by 29 percent to N272.6 million from N210.9 million in 2018. This saw an increase by 20.7 percent in overall revenue for the period under review.
Also, a major contributor to the company’s bottom line was the surge in other income recorded by about 129 percent to N151.7 million, with gains from sales of assets, investments, sales of scrap, rentals, unclaimed dividend, and exchange gains all contributing immensely to growth.
Compared to previous performances, this is rather impressive in the view of investors as company shows future growth prospect.
The Group had in the past consistently made losses in the last three years. Vitafoam made a loss after tax of N71.9 million in 2015, N32 million in 2016 and N127 million in 2017.
However, results for the 9 months ended June 2018 show the group is on the path of profitability once again as its profit after tax stood at N515 million in 2018 compared to N133 million made in the prior year which finally reflected in current result.
As at the start of 2019, Vitafoam Nigeria Plc announced the introduction of eight new products into the market. According to the management of Vitafoam, the new offerings will help it expand its revenue base, enhance customers’ healthy living and boost shareholder value.
The new products include Vita Pearl, a pillow that regulates temperature and draws moisture from the body, assorted customised beds, Sofas, Trifold mat for leisure, Reading chairs, three specialised mattresses including orthopedic and classic and various polyurethane sandwich panel steels.
Interestingly, the company, in a bid to win more customers, almost doubled down on advertising. Advert expenses surged by 86 percent from N64.6 million in half year 2018 to N121.2 million in its 6-month period ended march 2019.
David Ibidapo
